Many people and / or
small organizations create websites strictly to share
information, to advertise their non-profit services, to advertise
their small craft projects, or to voice their political or religious
ideas. They will agonize over choosing the most appropriate domain
name that accurately defines their small company, or they may merely
register their current name or nick-name, or an acronym of their
company’s trade name or a shortened version a trade name. However
the process, they may register a domain that causes a representative
of a corporate entity to send a demand letter advising them to cease
and desist using this prized domain name.

What
do these domain name registrants do next? They’re faced with
(1) losing their prized domain name or (2) spending a great deal of
money in order to keep it. These domain registrants feel the
challenger’s actions are unfair and question the means by which
the challenger can “take away” their domain name.

If the
domain registrant can’t persuade the challenger that she
innocently registered the domain without any knowledge of the
challenger’s asserted mark, the challenger will most likely take
legal action. There are a number of administrative forums where an
arbitration may be filed under ICANN’s
(Internet Corporation For Assigned Names and Numbers) UDRP (Uniform
Domain-Name Dispute Resolution Policy).

A
challenger may also file against a registrant in a court of
competent jurisdiction. (A court of competent jurisdiction is one
that has both subject matter and personal jurisdiction.
Subject matter provides the particular court with the power to hear
the case and personal is court’s power over the people or entities
involved in the case)

UDRP

Under UDRP
rules, an action against a domain registrant is available
because integrated in all domain name registration agreements is a
requirement that each registrant “submit to a mandatory
administrative proceeding in the event that a third party (a
‘complainant’) asserts” and can prove each of the following:

(i) [that the
registrant’s] domain name is identical or confusingly similar to a
trademark or service mark in which the complainant has rights; and

(ii) [that the registrant
has] no rights or legitimate interests in respect of the
domain name; and

(iii) [that the
registrant’s] domain name has been registered and is being used in
bad faith.

UDRP (4)(a)

On a certain level the registrant can fight back
because the domain registrant is allowed to assert “reverse domain
name hijacking” to request that the arbitration panel make a
finding that the challenger brought the complaint in bad faith
pursuant to UDRP Rule 1 and Rule 15(e). In other words, a
domain registrant can assert that the complainant is misusing the
arbitration proceeding in an attempt to “take” a domain or in an
attempt to harass the domain registrant. If the arbitration panel
finds that a complainant used the dispute resolution policy in “a
bad faith attempt to deprive a registered domain name holder of a
domain name,” there is a likelihood that the complaint will fail.
However, the UDRP establishes no specific penalties for “reverse
domain name hijacking” and a finding by the panel of “reverse
domain name hijacking” is rarely granted.

For example, one early UDRP
decision, Goldline
International v. Gold Line, dealt with the domain
“goldline.com,” common terms used in everyday language which can
be described as laudatory or even descriptive when used in
conjunction with a line of gold jewelry. In this case, the
registrant / respondent was an individual who operated under several
businesses, including Gold Line Internet, specializing in vanity
toll-free numbers, domain name addresses, and the creation of
intellectual property. The complainant, Goldline International,
Inc., was a business dealing in goods and services relating to coins
and precious metals. Gold Line Internet brought a “reverse domain
name hijacking” claim against Gold International in its response
to the UDRP complaint. Gold Line pointed out to the panel, that
although Goldline International had registered trademarks, their
rights were not superior to the other GOLDLINE trademark holders.
Furthermore, there were at least 47 trademark applications filed
since 1958 for “GOLD LINE” and “GOLDLINE” and Goldline
International had not objected in any way to any of these
applications. The panel reviewed all criteria relating to the
registrant’s bad faith and found no evidence that respondent
registered “goldline.com” to profit by selling or renting it to
Goldline International, that respondent selected the domain because
it was laudatory, that respondent’s goods and services were not in
the same competitive market, nor was respondent trying to
commercially trade on Goldline International’s reputation by
creating confusion in the minds of consumers (at that time there
were at least 10 other active “Goldline” businesses in
California).

After determining that the
domain name registrant had no bad faith intent, the panel reviewed
the “reverse domain name hijacking” claim. The panel
found that “gold line” could have multiple legitimate uses,[i]
that complainant’s mark was limited to a narrow field, and that
under a reasonable investigation, complainant could have ascertained
that respondent did not register the domain in bad faith.
Additionally, since respondent had expressly notified complainant of
the facts, including the multiple GOLD LINE users, and asserted
Goldline International actions abusive if they pursued any further
action, the panel found that complainant had engaged in “reverse
domain name hijacking.”

If the registrant / respondent
fails to prove its case and the panel finds for the complainant, the
domain will be transferred within ten business days. Of course the
administrative proceeding is binding unless an action is brought in
a court of competent jurisdiction within that ten-day period. ICANN,
UDRP
Rule 4(k).

Civil Action in US Court

In the United States, the
Anticybersquatting Consumer Protection Act (ACPA) 15
U.S.C. 15 U.S.C. § 1114(2)(D)(v) permits the domain name
holder the exclusive remedy to bring a civil action when their
domain has been suspended, disabled, or transferred as a result of
an ICANN proceeding, in order to establish that their use of the
domain is not unlawful. The court is authorized under the statute to
grant injunctive relief to the registrant, including reactivation or
transfer of the domain to the registrant. Id. At this time, a
registrant will generally bring a declaratory judgment action, based
on “reverse domain name hijacking” 15
U.S.C. § 1114(2)(D)(v) [ii] seeking injunctive relief.

2) that its
registered domain was suspended, disabled, or transferred under the
registrar’s policy as described under 15 U.S.C. § 1114(2)(D)(ii)(II)
(a reasonable policy by such registrar, registry, or authority
prohibiting the registration of a domain name that is identical to,
confusingly similar to, or dilutive of another's mark);

3) that the
owner of the mark that prompted the domain to be suspended, disabled
or transferred is on notice, by service or otherwise, of the action;
and

4) that the
registrant’s / plaintiff’s use or registration of the domain is
not unlawful pursuant to the Lanham Act.

Barcelona.com, 330 F.3d at 626.

Barcelona.com, a case decided by
the United States District Court for the 4th Circuit, is instructive
in understanding the ICANN UDRP proceedings as well as, the process
for bringing a civil action against an overreaching trademark owner
for “reverse domain name hijacking.” In that case a
Spanish citizen registered the domain barcelona.com
with Network Solutions, Inc.,
established a Delaware company, Bcom, Inc., in the United States and
proceeded to develop the website at the domain as a tourist portal
with Barcelona, Spain type information. After some initial
correspondence, the City Council for Barcelona, Spain demanded that
Bcom, Inc. transfer the domain to them based on their ownership of
over 150 Spanish trademarks, the majority of which incorporated the
term Barcelona. When Bcom, Inc. refused, the City Council filed an
administrative complaint with WIPO, under the ICANN policy.
The single panelist found 1) that Bcom, Inc.’s domain was
confusingly similar with the Barcelona’s City Council’s 150
trademark, 20 that Bcom, Inc. had no legitimate interest in the
domain, 3) that Bcom, Inc. registered the domain in bad faith and
ordered the domain be transferred to Barcelona’s City Council.
Bcom, Inc. commenced a declaratory judgment action in the US
District Court for the Eastern District of Virginia and that court
determined that Bcom, Inc. did not have a valid claim for “reverse
domain name hijacking.” The court ordered an immediate transfer of
the domain. Bcom, Inc. appealed to the US District Court for
the 4th Circuit. The court found, among other things, that
Bcom, Inc. use of the domain was not unlawful under United States
law.

The Lanham Act provides that a
term that designates a geographical significance area cannot be a
registered trademark unless it has acquired secondary meaning. Barcelona.com,
330 F.3d at 629 (citing Resorts of Pinehurst, Inc. v.
Pinehurst Nat'l Corp., 148 F.3d 417, 421 (4th Cir. 1998). In
other word, “ ‘Barcelona’ should have been treated as a purely
descriptive geographical term entitled to no trademark protection.
(See 15 U.S.C.
§ 1052(e)(2))” Id. Since the trademark owner,
Barcelona City Council, did not have US trademark rights in
“Barcelona,” they could not assert those rights against the
domain registrant. Therefore, Bcom, Inc.’s use of
barcelona.com was not unlawful. Thus Bcom, Inc. established
entitlement to relief under 15
U.S.C. § 1114(2)(D)(v) with respect to the domain name.
Barcelona.com, 330
F.3d at 629.

Unlike the UDRP Rule 15(e) the ACPA,
§ 1114 (2)(D)(iv), provides remedies to the registrant if a
challenger, in bad faith, attempts to deprive a registered domain
name holder of a domain name. That is, if a registrar refuses to
register, removes from registration, transfers, temporarily
disables, or permanently cancels a domain name “based on a knowing
and material misrepresentation by any other person that a domain
name is identical to, confusingly similar to, or dilutive of a
mark” that person (the challenger) “shall be liable for any
damages, including costs and attorney's fees, incurred by the domain
name registrant as a result of such action.” Additionally, the
court is authorized to grant injunctive relief to the registrant, to
reactivate the domain or to transfer the domain name to the
registrant. 15 U.S.C. § 1114(2)(D)(iv).

Under United States law,
corporations use the ACPA to assert their rights. The ACPA allows
the owner of a distinctive or famous trademark or service mark to
bring an action against a domain registrant, an alleged cyber
pirate,[iii] if the mark owner can show that 1) the registrant’s
domain is identical or confusingly similar to the owner’s
distinctive mark or identical, confusingly similar or dilutive of an
owner’s famous mark and if 2) the alleged cyber pirate used,
registered, or trafficked in the domain name with the bad faith
intent to profit from the sale of the domain name. 15 U.S.C. § 1125
(d)(1)(A).

In order to determine if a
trademark owner indeed has a distinctive or famous mark and to
determine if the registrant’s domain name is identical or
confusingly similar to the trademark owner’s mark, courts use
traditional trademark law standards and principles.

However, the principle of “bad
faith,” is the defining principle that may allow the trademark
owner to not only “take” the domain, but also obtain additional
damages against a domain name registrant. Therefore, the ACPA
identifies the following criteria a court must use to determine
whether the domain name registrant registered the domain in “bad
faith” with the intention to profit from the use of the domain:

1) whether the
domain name registrant has trademark rights or other intellectual
property rights in the disputed domain,

2) the extent
that the domain is the registrant’s legal name or a name by which
the registrant is commonly known,

3) whether the
registrant has prior use of the domain to identify bona fide goods
or services,

4) whether the
registrant has bona fide non-commercial or fair use of the domain,

5) whether it
is the registrant’s intent to divert consumer’s from the
trademark owner’s site to the registrant’s site either for
commercial gain or to tarnish, dilute or disparage the trademark
owner’s mark by confusing consumers into believing that the
registrant’s site is sponsored by the trademark owner,

6) whether the
registrant offers the domain for sale to the trademark owner, with
the intent to profit from the sale, without intending to use the
domain for a bona fide purpose, or there is an indication of a
pattern of such conduct,

7) whether the
registrant uses false contact information when registering the
domain, or has a pattern of such conduct,

8) whether the
registrant’s has acquired multiple domain names which the
registrant knows are similar to famous or distinctive marks, and

9) to what
extent the trademark is used in the domain of the registrant is
distinctive or famous.

15
U.S.C § 1125 (d)(1)(B)(i).

However, if a court finds the registrant is a cyber
squatter by using the above criteria, a registrant still has an
escape clause. That is, if the court determines that the registrant
had a good faith belief “that the use of the domain name was a
fair use or otherwise lawful,” there will be no “bad faith
intent”. 15 U.S.C. 1125 (d)(1)(B)(ii) (S. Rep. 140, at 10, 106th
Cong.(1999)(enacted).

[ii] “And to balance
the rights given to trademark owners against cybersquatters, the
ACPA also provides some protection to domain name registrants
against "overreaching trademark owners." [S. Rep. No.
106-140, at 11 (1999)]; see also 15 U.S.C. § 1114(2)(D)(iv)-(v).
Thus, § 1114(2)(D)(v) authorizes a domain name registrant
to sue trademark owners for "reverse domain name
hijacking." Under that reverse domain name hijacking
provision, a domain name registrant who is aggrieved by an
overreaching trademark owner may commence an action to declare
that the domain name registration or use by the registrant is
not unlawful under the Lanham Act.”(footnote omitted)
Barcelona.com v. Excelentisimo Ayuntamiento De Bardelona, 330
F.3d 617, 625(4th Cir. 2003).

[iii] In the
United States “cybersquatting,” the act of registering
or “squatting on” a domain name without using it in order to
sell or license it and many time the domains names are generic (house.com
or watch.com), is perfectly legal. On the other hand, a
“cyberpirate” registers domain names which are marks or
incorporate marks of a trademark owner with the intent to sell
the domain to the owner for a profit, or to use the domain with
the intent to trade off of the trademark owner’s associated
goodwill.